Wanted: New Business Models for Profitable Expansion of Mobile Telephony in Rural India

Mobile network operators' agendas for profitable growth include expansion into rural areas of developing countries, especially India. However, capitalizing on that opportunity will not be easy. Our research suggests that operators have yet to create and implement business models capable of driving profitable growth through rural expansion. We found that mobile network operators hold some mistaken assumptions about rural consumers’ needs and desires regarding mobile services. To achieve profitable growth and high performance through rural expansion, operators must develop a more accurate understanding of the mobile value proposition in rural communities, as well as potential barriers to adoption. . Mobile operators in rural markets must also build business models that work in the short term as well as the long term. Sacrificing short-term revenues to expand market footprint may not be the best strategy, because stiffening competition in urban markets will likely prevent operators from cross-subsidizing their rural expansion strategies. This report serves as a “midpoint review” of some key presumptions, strategies and models companies have used to drive their rural strategies over recent years.